National Clothesline

There are four major functions around which a drycleaning business must be organized.

These functions are:

1. Customer Service.

2. Production/processing.

3. Sales and Marketing.

4. Finance and Accounting.

The average drycleaning business in the United States does about $250,000 per year in sales. In these companies, the owner is the one individual who must manage all four functions simultaneously.

The good news is that when your business is small enough you can handle all functional areas even though you are not an expert in each area. Many drycleaners possess technical skills and are most comfortable in the plant while others shine at marketing. Some drycleaners are customer service gurus while others prefer working the numbers.

As a company grows, all tasks require more time. Unfortunately, the amount of time available in a day or in a week does not grow. It is at this point in the life cycle of your business that you can get that awful sense of being overwhelmed. When this happens, you have two choices.

The first and easiest is to hide away in your comfort zone — you know the place: at the press; behind the spotting board; fixing a machine; doing paperwork, etc.

The second, and more difficult, choice is to seek out and cultivate other people who can and will take on more responsibility. This choice will take a great deal of your time and payroll dollars while you train this individual.

Case study

Situation: This drycleaning business consists of one plant with a front counter; one drop store; and two residential pick-up and delivery vans.

The front counter at the plant has reached capacity in terms of parking space and front counter space. The configuration of the lot and building do not allow for a drive-thru. The plant is large enough to process an additional $5,000 to $6,000 per week in volume.

Background: The owner of this business has always promoted workers from within the company. He currently employs a customer service manager who is responsible for all front counter personnel at the plant and at the drop store. In addition, the customer service manager is responsible for the two route drivers.

The company employs a competent drycleaner/spotter and a wet side group leader. The owner fills the position of production manager.

Total sales for this company are just over one million dollars per year. The owner owns the plant real estate but he rents the drop store location. He has an opportunity to purchase a commercially-zoned lot located in a growing area eight miles from his current plant.

The problem: This owner is driven to continue to grow his business, but his plate is already too full.

1. Should he buy the lot and build or should he remain at his current location for the time being?

2. Because the business has no one on staff who can take over the position of production manager, should the owner break precedent and look outside the company to fill this position?

The solution: Owning real estate is a good way to increase your net worth. The owner should purchase the property and build a drop store. The building should be designed so that an addition can be added to the drop store for the owner to install a second plant when his current plant reaches full capacity. This scenario offers both short- and long-term benefits to the drycleaning business and the owner.

For the owner to continue to successfully grow his business he will need to have a solid management team. This team must start with a production manager — the owner will be too busy to continue in this position. Because there is no one on his staff capable of moving up to the position of production manager, the owner must hire outside the company.

There are two schools of thought about hiring a manager from outside your company. First, should you look for someone with industry experience or someone with solid management experience from outside the industry?

An individual with industry experience will have a basic understanding of the drycleaning process; the chemicals used; steam pressure; vacuum systems; finishing; and, textiles in general. This person also brings along old habits and ideas of “how things should be done”.

An individual brought in from outside the industry will have a longer learning curve and require more of your time. This person will not possess any “insider knowledge” or tricks of the trade. This means that this person will learn only your way of running a drycleaning business.

The lesson: Planning and managing growth is critical. When you bring someone into your business, you are making an investment of time and money. Most importantly, before your hire a manager, write down what it is you expect from that individual. You cannot expect anyone to know what is or is not expected of them if you do not put it in writing.

1. Determine what the reporting relationships will be. In other words, who works for whom and keep in mind that no one can have more than one boss.

2. Determine the level of authority a manager has. Managers should have the authority to hire and fire, but that level of authority can be withheld from a new manager for the first six months.

3. Clearly define your expectations in terms of pieces per hour, labor costs as a percentage of sales, number of redos, number of and dollar amount of claims.

4. Establish a realistic time frame for the new hire to accomplish specific goals. These goals can be as mundane as designing and implementing an attendance program to reduce lateness and absenteeism or, as exciting as increasing productivity 10 percent while improving quality.

Successful growth does not happen by accident… it is the result of good planning.

Remember, in the game of business the more you know the better you can play the game.

Alan Robson is a private consultant dealing with the specialized needs of the drycleaning industry. For more information, contact him by telephone at (508) 753-6619 or send e-mail to him at: alan@bizbuilderonline.com or visit the Biz Builder web site: www.bizbuilderonline.com.